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Risk tolerance

By Updated

The readiness to bear a given risk in order to achieve objectives 1. Engineered as the highest residual band a system tier may carry before a deploy gate requires a signed acceptance.

Developed in
ch. 13, Risk appetite and tolerance, compiled into gates
Chapters
ch. 13, Risk Management
Contrast with
Risk appetite
Source
1 numbered reference, listed below

Commonly confused

  • Risk appetite versus Risk tolerance

    Risk appetite
    How much risk, and of which kinds, an organisation is prepared to take on in pursuit of its objectives.
    Risk tolerance
    The readiness to bear a given risk in order to achieve objectives.

    The differenceHow much risk the organisation will take on overall, against the residual band one system may carry.

    Why it mattersAppetite is a board statement compiled to data; tolerance is the threshold a deploy gate reads.

Where it is used

3 chapters of the Body of Knowledge use the term. Each link opens the first section that does.

Patterns that use this term

One pattern page uses the term.

  • Proportionate governance

    Running the same risk loop at an intensity set by organisation size, sector, maturity and risk tolerance, above a floor of controls that never tailors away.

Sources

  1. [1] Artificial Intelligence Risk Management Framework (AI RMF 1.0), NIST AI 100-1 (risk tolerance and residual risk; seven trustworthy characteristics; transparency answers "what happened", explainability "how", interpretability "why"; MAP 1.1 intended purposes; MANAGE 1.1 go/no-go determination; profiles). NIST. 2023-01-26. https://doi.org/10.6028/NIST.AI.100-1 (verified: primary)

Definitions of legal terms paraphrase the cited text, which governs. Dated statements are as of .

Cite this term

García Aibar, J. (2026). Risk tolerance. In AI Governance Engineering: The Thesis & Body of Knowledge (v0.5.0), Glossary. https://doi.org/10.5281/zenodo.22956197. https://aigovernanceengineer.com/glossary/risk-tolerance. CC BY 4.0

BibTeX

@misc{aige2026risktolerance,
  author  = {Jorge García Aibar},
  title   = {{Risk tolerance}},
  note    = {Glossary, AI Governance Engineering: The Thesis \& Body of Knowledge, version 0.5.0},
  year    = {2026},
  doi     = {10.5281/zenodo.22956197},
  url     = {https://aigovernanceengineer.com/glossary/risk-tolerance}
}